Understanding financial options for Long-term Care

By Chris Orestis

Long-term care is a reality that everyone will eventually confront — either for themselves, a loved one, or both — and it is an expensive proposition that too few people are prepared for or understand.

Unfortunately, most people don’t think about how they will pay for care until they are confronted by a serious health situation.

And the worst time to start planning is in the midst of a crisis; the options to pay for care can be complicated and take some time to access.

The three primary ways to pay for care are with Medicare, Medicaid, or private pay.

1. Medicare is an “age-based” program that will cover the first 100 days of rehabilitation care in a licensed skilled nursing facility upon direct discharge from a hospital.

2. Medicaid is a “means-based” program that covers skilled nursing care. To qualify, an applicant must meet standards of medical necessity and meet set asset and income levels below the poverty line.

Applying for Medicaid can be a challenging process that requires the applicant to submit detailed medical and financial records. Medicaid will “look back” five years at financial records to make sure assets have not been hidden or transferred to family members.

3. Private pay primarily comes from an individual and/or a family’s savings, insurance, assets, and income. People who use private pay can choose any form and location of care they want.

Independent and assisted living, as well as most forms of home care, are primarily private pay. Nursing homes are primarily covered by Medicaid for people who can qualify. Skilled rehabilitation and hospice are primarily covered by Medicare.

Private Pay Options for Senior Living and Long-Term Care Families need to do all they can today to prepare to fund long-term care and protect themselves from both the financial costs and the possibilities of legal liabilities.

There are actions that people can start taking to prepare themselves for